EU-funded project to help Zambia improve governance of mining sector

Being one of the world’s leading copper exporters comes with its own problems and one of them, for Zambia, is the huge task of monitoring its mineral production so as to ensure maximum revenues from the mines.

The European Union, which aims to strengthen economic governance in Zambia, allocated €4.7 million to implement the MineralProduction Monitoring Support Project (MPMSP) to help Zambia improve governance of its mining sector.

The project of 3 years’ duration, from 2015 to 2018, is being carried out by a consortium led by Adam Smith International (ASI) and including Ecorys (UK), the Revenue Development Foundation and PMTC (Zambia) Ltd. Zambian and international experts working within the Ministry of Mines and Minerals Development (MMMD) under ASI management and MMMD guidance.

The objective of the MPMSP is to ‘strengthen the ability of the Ministry of Mines and Minerals Development (‘MMMD’) to fulfill its mandate as mining authority to monitor effectively mining activities and mineral production in Zambia, and to share this information with other relevant government agencies to increase domestic revenue mobilisation.’

The project is in line with what President Lungu said is Government’s commitment to engaging the private sector in identifying solutions that will help the country offset some of the problems affecting the mining sector.

“While Government cannot control the external shocks such as falling commodity prices that have impacted negatively on the country whose economy is copper-export led, continued collaboration amid economic turbulences will help minimise the effects of the shocks,” said
President Lungu.

One of the milestones of the Mineral Production MonitoringSupport Project was the launch of the online export permit module at the Ministry of Mines and Mineral Development (MMMD), which went live on 1st June, 2016.

The Ministry is now processing and issuing all mineral export permits via a digital interface. This administrative system was developed by project consortium partner the Revenue Development Foundation.

Moving away from a paper-based system has increased efficiency and strengthened accountability in the issuing of Mineral Export Rights, as well as the recording of related payments thus significantly improving the audit trail.

June also saw the Ministry of Mines and Minerals Development participating in the Zambia International Mining and Energy Conference (ZIMEC 2016) in Lusaka. The Ministry proudly displayed some of the new gemmology equipment purchased by the European Union as part of the Mineral ProductionMonitoring Support Project’s work on capacity building.

Director of Mines Mr Mooya Lumamba, speaking at ZIMEC, said the project will enable his ministry to better monitor mineral production and to share information with relevant Government agencies such as Zambia Revenue Authority (ZRA) for purposes of collecting royalties and taxes.

“With a stronger monitoring system, Zambia will be able to realise revenue taxes in a proper and coordinated system and without declaring false production records by mining houses,” he said.

“Inevitably, the first sources of data on mining activities and mineral production are the mines themselves. However, currently the country’s authorities rely entirely on mineral production data and other related information provided by the private mining industry,”
said Mr Lumamba.

He said given the fact that Government authorities and private companies do not necessarily share the same agenda, this data and information may or may not be entirely sufficient and accurate, hence launching of the MPMSP.

Mr Lumamaba said the EU-funded project is concentrating on building capacity within the Ministry to re-establish physical presence on the ground to improve monitoring and inspection programmes in the mines throughout the mining cycle (exploration-mining-processing-export).

Mr Lumamba said the next element in the sequence is about effective data-management and data-sharing.

This includes management of data provided from the mining companies, and its verification through an MMMD monitoring system. It also includes information gathered from other sources as well as supporting effective inter-agency data and information-sharing arrangements and structures.

He said Zambia has made considerable progress in terms of transparency of the mining sector and benefit-streams from mineral exploitation.

The country has also joined the worldwide initiative EITI (Extractive
Industries Transparency Initiative).